Governor Hutchinson Signs Tax Cut Bill, To Take Effect in 2016

LITTLE ROCK, AR - Governor Asa Hutchinson fulfilled a campaign promise on Friday when he signed into law tax cuts aimed at the middle class.

This is not the first bill the governor has signed into law, but it's the first time he made an event out of it and that shows how important the issue is.

The governor flanked by legislators as he talked about the impact he says the tax cuts will have on the state's economy. They reduce the state income tax rate by one percent for people earning between $21 and $75 thousand a year.

The bill also set the state's capital gains tax rate at 40 percent.

That's higher than rates passed by lawmakers in 2013 and there's been talk about attempts to seek more tax cuts, for the so called job creators.

"If you reduce revenue by additional tax cut it has a consequence on the budget and we have to look at that side," says Hutchinson.

The governor is very cautious about further tax cuts. He says this round of cuts will make Arkansas' economy more competitive with other states, providing a selling point for businesses looking to take root in the state.

The new tax rates go into effect the first of next year, the cuts are expected to cost the state $90 million a year by the time they're fully implemented.

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